President Trump’s negotiations with President Xi Jinping report a shocking win on global technology transfers, but US companies need to make the next move. Knocking China out of number one on global exports will take mobilizing the American private sector and formulating a strategy of coordination and cooperation among US companies and allied partners internationally. In 2017 China showed a positive trade balance of $873B after the communist state exported $2.41T and imported $1.54T. One belt, one road is the theme for Chinese direct acquisition and other strategic investments in port facilities on a global scale in recent years that now point to its $1.78T lead in the global export market over the United States. With American manufacturing making a comeback we need to consider export logistics.
Beyond the imbalanced trade tariffs and currency manipulation addressed in recent negotiations with President Xi Jinping, China was reaping the benefits of its overseas mining operations, its manufacturing capabilities, and its global transportation infrastructure investment known as the Belt and Road Initiative (BRI) spanning several continents to transport material from international trade partners to China. Gordon Chang interviewed on Fox Business remains cautious on China’s dominance in 11 sectors of technology and its Made in China 2025 manufacturing initiative. How can US companies compete? The answer lies not in the New Green Deal that aims to eliminate aviation on the cusp of commercial supersonic flights and commercial space travel as well as the petroleum industry as a whole, but in coordinated efforts to invest in transportation infrastructure at sea, air, and ground facilities in the US and throughout global supply chains.
Pushing China out of its current number one spot on global exports calls for streamlining air, sea, and ground transportation infrastructure to improve logistics in the US and allied countries along global supply chains. Rather than overspending on large land acquisitions to create vast road networks that connect to the US as China is doing with its Belt and Road Initiative, the US should focus on sea and air bridges for freight in allied countries and regions where US influence is expanding. Inside the US, rather than following the recently proposed agenda eliminate oil and gas consumption, the US should look for ways of connecting its top producing cities with high speed freight and passenger rail systems that push out product in record time. This includes high-speed rail systems to connect regional airports in growing middleweight cities within an ideal distance for high speed rail travel. The technology currently exists for regional rail systems to compete with regional aviation logistics. Japan in 2015 tested a seven-car maglev, magnetic levitation, train that reaches a top speed of 603km/h or 374.68 mph. Siemens is currently testing customizable trains for intercity travel in Germany that can travel at 223.69 mph. Germany is ranked 2nd in global exports.
This initiative will enable airlines to focus on longer distance flights where they earn more money and unclog some the nation’s busiest roads. Some rail systems recently proposed may be too close together or too far apart. Rail destinations are too close to one another such as commuter distances do not earn enough revenue to be cost effective, and distances too far apart such as an east to west coast line cannot compete with air speed. The ideal rail system would convert road travel times between 4-6 hours and air travel times of at least one hour in the air and 2 hours in the airport down to roughly half an hour by rail competing with some of the most advanced Japanese engineering. Anything longer is better suited to air travel and shorter distances such as cities only an hour apart may still be better suited to more cost-effective commutes by road. Short distance rail commutes between nearby cities are also difficult to market and sell passes to commuters who then have to rely on taxi services that raise their costs of commuting by rail. Growing cities around 4 to 5 hours apart are most ideal for cost-effective rail construction and ticket sales.
By constructing high-speed rail systems to run between major regional airports and seaports, outgoing product for export will reach both aviation and seaside connections at a faster rate and incoming products will reach interior destinations in that region more quickly. This will increase each city’s export capacity as the US has begun producing more material for export in steel and other metals, oil and petroleum based commodities, automotives, and many other manufactured products. It will also increase the combined GDP for connected tri-city networks and encourage regional diversity with growth. China’s cluster cities are made up of one or two more major cities with surrounding smaller cities and towns that combine to form the 6 economic diversity and GDP needed for each area. In the US, tri-city or tri-state networks can be utilized in a similar way to increase the productivity of the region.
Overseas airports, seaports, and other transportation facilities are being supported by USAID and development finance in new allied countries. These are also destinations where US companies will be expanding globally. Top GDP earning cities along international supply chain routes are ideal candidates for transportation infrastructure investment to increase the speed and efficiency of the import/export process across international partners and increase the quality of global security concerning the exploitation of transport logistics for illicit trafficking. Mirroring the transportation development in the US at the seaports and airports inside the growing cities of allied countries will strengthen international supply chains, improve international diplomacy, and speed up overall infrastructure development for developing countries. This will be provided in the form of raised GDP with raised export capacity and higher revenue from tariffs. This will also strengthen the growing economic development and security for countries allied with the US as smart technology and advanced surveillance systems are applied to transportation logistics. The cumulative effect is a more fluid transportation network internationally capable of directly competing with China’s Belt and Road Initiative overseas while maintaining smaller footprints however in key territories. US investment in its global supply chain facilities will offer a direct countermeasure for subversive Chinese investments such as those in Europe.